A Few Reasons of Growing Unemployment in Pakistan

A Few Reasons of Growing Unemployment in Pakistan

Unemployment is one of the biggest problems of Pakistan. That person is unemployed, who has ability to do work and is willing to do work but is unable to get a job opportunity. In the current situation more than 3 million people are unemployed in Pakistan and unemployment ratio is more than 12%.

The biggest reason of unemployment in Pakistan is concerned with the backwardness of agriculture sector. Agriculture is the biggest sector of our economy that contributes 20.9% to GDP and 44% of people get jobs from this sector directly or indirectly. Unemployment in this sector is from two sides.

Firstly, the adoption of latest machinery and capital intensive technology decreases the demand for labour. Secondly, there is less availability of fertilisers, pesticides, quality seeds, absence of land reforms and lack of agriculture education. Due to these factors agriculture sector is not expanding which leads to general and disguised unemployment.

Industrial sector is the second largest sector of our economy and contributes 19% to national income. This sector should employ a large number of labours but due to backwardness it is employing a small number of people. There is a huge difference between the demand and supply for labour. The absence of such kind of planning to produce doctors, engineers, scientists etc, should be done according to the need of different sectors of the economy. The government should give out incentives to join such academic programmes.

Not to mention the electricity breakdown, this obstructs the already established industry. It deteriorates the industrial production, resulting in the prevailing unemployment ratio. Therefore, load shedding of electricity is disturbing the economy.

High cost and low quality is responsible for less demand for our agro and industrial items which in turn results in loss of interest from domestic and international producers. This too adds to the growing unemployment.

In Pakistan the education system is defective and there is no educational planning. This system is producing graduates but they either do not want to stay in the country or are not paid properly which results in loss of technical staff. In addition, lack of technical and vocational institutions also adds to the growing misery. One needs to realize that it is impossible to set up one’s own business without technical education. A majority of businessmen are not maximizing their outputs which results in them becoming bankrupt – this factor generates unemployment on a massive level.

Millions of people in Pakistan are poverty stricken and these people are overburdened with expenditures and their savings are very low. It is said that for the reasonable growth of economy, saving rate should be at least 25% in any country, but in Pakistan it is only 13 to 14% which is very small. Low investment level is due to fewer savings, ultimately there is unemployment.

The tax system is not satisfactory; ratio of direct taxes is more than indirect taxes. Tax evasion is common. Due to less income from taxes, government cannot start developmental projects. If there is no investment, then from where will the public find jobs? On the other side, if government takes step to increase indirect taxes, it would also affect investment and ultimately employment level.

Fiscal and monetary policies are also responsible for unemployment. In view of fiscal policy, Pakistan has fewer funds to invest in job providing projects and every annual budget shows deficit. Through the monetary policy if the government increases the rate of interest, it in turn discourages the investors from getting loans.

Political instability, bad law and order situation, army’s interference, bomb blasts, terrorism, inconsistent economic policies etc are the factors which are disturbing domestic and foreign investment. Pakistan investors are taking away their money to Dubai and other countries of the world.

9/11 incident, Gulf war and the baseless allegations of terrorism hamper the image of Pakistan which has been affected very badly at the international level. So in the current scenario Pakistani’s have limited job opportunities in other countries of the world.

Since 1947, Pakistani rulers got loans from IMF, World Bank and many other sources. Such loans were not utilized honestly. Current external debt of Pakistan is more than 50 billion dollars. Government has to allocate a huge amount for the repayment of loans with interest.

Concluding, I would like to suggest that with proper economic planning, consistent policies of government, better law and order situation, abolishing energy crisis, and sincerity with Pakistan we can not only tackle the issue of unemployment but all economic problems of our country.

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Posted by Momina Khan on Oct 21 2011. Filed under Opinion, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry